Elanco Provides Business Update Related to COVID-19 - Seite 2

Much like the human health system, the American Veterinary Medical Association, along with industry organizations across Europe and other countries, has recommended limiting patient care to acutely ill animals and emergencies, rescheduling annual exams and elective procedures. This guidance increases the importance of telemedicine, direct shipment and alternative channels, while underscoring the significance and value of Elanco’s pending acquisition of Bayer AG’s animal health business.

Elanco is executing its omnichannel approach with respect to companion animal health and determining the best methods for reaching pet owners and veterinarians. The company continues to assess the best strategy to strengthen its long-term competitive commercial position and go-to-market mix, with the goal of reaching pet owners where they wish to shop and enhancing our partnership with veterinarians to provide the best care for pets.

Update on Pending Acquisition of Bayer AG’s Animal Health Business

Elanco’s excitement related to the addition of Bayer AG’s animal health business is unabated by the COVID-19 situation as it confirms the value of diversifying our companion animal business into the over-the-counter (OTC) market. Likewise, the expanded global scale puts Elanco in a stronger position to weather tough business environments over the long-term as the combined company focuses on innovating to meet unmet needs of animals for veterinarians, farmers and pet owners across the globe.

The pending acquisition continues to advance toward a mid-year 2020 closing. Elanco has received regulatory clearance in China, Colombia, Turkey and the Ukraine, and is continuing to collaborate with other key jurisdictions. Elanco has signed agreements to divest certain products it anticipates will be necessary to complete these reviews. Further, Elanco has fully secured financing to complete the transaction through its completed equity issuance and pricing of its Term Loan B earlier in the first quarter. Given the recent decline in interest rates, Elanco entered into derivative transactions to swap a portion of its floating interest rate on the $4.275 billion Term Loan B to a fixed rate obligation. These derivative transactions provide greater certainty on the Term Loan B interest expense. Elanco’s first significant obligation after completing the acquisition is its $500 million in senior notes due August 27, 2021.